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HARTZ MOUNTAIN ASSOCIATES
Landlord,
and
Tenant
G-III LEATHER FASHIONS, INC.
LEASE
----------
Premises:
in
1000 Secaucus Road,
Secaucus, New Jersey 07094
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TABLE OF CONTENTS
ARTICLES
PAGE
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----
1
- DEFINITIONS ..................................................
1
2
- DEMISE AND TERM ..............................................
6
3
- RENT .........................................................
6
4
- USE OF DEMISED PREMISES ......................................
8
5
- PREPARATION OF DEMISED PREMISES ..............................
9
6
- TAX AND OPERATING EXPENSE PAYMENTS ...........................
9
7
- COMMON AREAS .................................................
10
8
- SECURITY .....................................................
11
9
- SUBORDINATION ................................................
13
10 - QUIET ENJOYMENT ..............................................
14
11 - ASSIGNMENT, SUBLETTING AND MORTGAGING ........................
14
12 - COMPLIANCE WITH LAWS .........................................
17
13 - INSURANCE AND INDEMNITY ......................................
18
14 - RULES AND REGULATIONS ........................................
21
15 - ALTERATIONS AND SIGNS ........................................
22
16 - LANDLORD'S AND TENANT'S PROPERTY .............................
23
17 - REPAIRS AND MAINTENANCE ......................................
24
18 - UTILITY CHARGES ..............................................
25
19 - ACCESS, CHANGES AND NAME .....................................
26
20 - MECHANICS' LIENS AND OTHER LIENS .............................
26
21 - NON-LIABILITY AND INDEMNIFICATION ............................
27
22 - DAMAGE OR DESTRUCTION ........................................
28
23 - EMINENT DOMAIN ...............................................
30
24 - SURRENDER ....................................................
31
25 - CONDITIONS OF LIMITATION .....................................
31
26 - RE-ENTRY BY LANDLORD .........................................
32
27 - DAMAGES ......................................................
33
28 - AFFIRMATIVE WAIVERS ..........................................
36
29 - NO WAIVERS ...................................................
36
30 - CURING TENANT'S DEFAULTS .....................................
36
31 - BROKER .......................................................
37
32 - NOTICES ......................................................
37
33 - ESTOPPEL CERTIFICATES ........................................
38
34 - ARBITRATION ..................................................
38
35 - MEMORANDUM OF LEASE ..........................................
39
36 - MISCELLANEOUS ................................................
39
EXHIBITS
Exhibit A - Demised Premises
Exhibit B - Description of Land
Exhibit C - Workletter
Exhibit D - Rules and Regulations
Exhibit E - Form of Non-Disturbance Agreement
Exhibit F - Approved List of Contractors
092193
091593
090993
LEASE, dated September 21st, 1993, between HARTZ MOUNTAIN
ASSOCIATES, a New
Jersey general partnership, having an office at 400 Plaza Drive,
Secaucus, New
Jersey 07094-3688 ("Landlord"), and G-III LEATHER FASHIONS INC., a
New York
corporation, having an office at 345 W. 37th Street, New York, New
York 10018
("Tenant").
ARTICLE 1 - DEFINITIONS
1.01. As used in this Lease (including all Exhibits and any Riders
attached
hereto, all of which shall be deemed to be part of this Lease) the
following
words and phrases shall have the meanings indicated:
A. Advance Rent: $40,194.75.
B. Additional Charges: All amounts that become payable by Tenant to
Landlord hereunder other than the Fixed Rent and Percentage Rent.
C. Architect: Kenneth Carl Bonte, or as Landlord may designate.
D. Broker: Chaus-Corpuel.
E. Building: The building or buildings located on the Land and
known as
1000 Secaucus Road, Secaucus, New Jersey 07094.
F. Building Fraction: A fraction the numerator of which is the
Floor Space
of the Building (approximately 202,040 square feet) and the
denominator of which
is the aggregate Floor Space of the buildings in the Development.
If the
aggregate Floor Space of the buildings in the Development shall be
changed due
to any construction or alteration, the denominator of the Building
Fraction
shall be increased or decreased to reflect such change.
Fl. Calendar Quarter: Any three-month period commencing on either a
January
1, an April 1, a July 1 or an October 1.
G. Calendar Year: Any twelve-month period commencing on a January
1.
H. Commencement Date: The earlier of (a) the date on which both:
(i) the
Demised Premises shall be Ready for Occupancy, and (ii) actual
possession of the
Demised Premises shall have been delivered to Tenant by notice to
Tenant, or (b)
the date Tenant, or anyone claiming under or through Tenant, first
occupies the
Demised Premises or any part thereof for any purpose other than the
performance
of Tenant's Work.
I. Common Areas: All areas, spaces and improvements in the Building
and on
the Land which Landlord makes available from time to time for the
common use and
benefit of the tenants and occupants of the Building and which are
not
exclusively available for use by a single tenant or occupant,
including, without
limitation, parking areas, roads, walkways, sidewalks,
landscaped and planted areas, community rooms, if any, the managing
agent's
office, if any, and public rest rooms, if any.
J. Demised Premises: The space that is outlined in red on the floor
plans(s) attached hereto as Exhibit A. The Demised Premises
contains or will
contain approximately 107,186 square feet of Floor Space subject to
adjustment
upon verification by the Architect.
K. Development: All land and improvements now existing or hereafter
constructed, located south of Route 3, east of the Hackensack
River, west of
County Avenue and north of Castle Road.
L. Development Common Areas: The roads and bridges that from time
to time
service and provide access to the Development for the common use of
the tenants,
invitees, and occupants of the Development, that are maintained by
Landlord or
its related entities.
M. Expiration Date: February 28, 2000. However, if the Term is
extended by
Tenant's effective exercise of Tenant's right, if any, to extend
the Term, the
"Expiration Date" shall be changed to the last day of the latest
extended period
as to which Tenant shall have effectively exercised its right to
extend the
Term. For the purposes of this definition, the earlier termination
of this Lease
shall not affect the "Expiration Date."
N. Fixed Rent: An amount at the annual rate of four and 50/100
Dollars
($4.50) per square foot multiplied by the Floor Space of the
Demised Premises.
0. Floor Space: As to the Demised Premises, the sum of the floor
area
stated in square feet bounded by the exterior faces of the exterior
walls, or by
the exterior or Common Area face of any wall between the Demised
Premises and
any portion of the Common Areas, or by the center line of any wall
between the
Demised Premises and space leased or available to be leased to a
tenant or
occupant.
01. Gross Sales: The dollar aggregate of: (a) the actual sales
price of all
goods and merchandise sold, leased or licensed and the charges for
all services
performed by Tenant or otherwise in connection with all business
conducted at or
from the Retail Premises, whether made for cash, by check, credit
or otherwise,
without reserve or deduction for inability or failure to collect
the same,
including, without limitation, sales and services (i) where the
orders therefor
originate at or are accepted at or from the Retail Premises,
whether delivery or
performance thereof is made at or from the Retail Premises or any
other place,
it being understood that all sales made and orders received at or
from the
Retail Premises shall be deemed to have been made and completed
therein even
though the orders are fulfilled elsewhere or the payments of
account are
transferred to some other office for collection, (ii) where the
orders therefor
result from solicitation off the Retail Premises but which are
conducted by
personnel operating from or reporting to or under the control or
supervision of
any employee at the Retail Premises, (iii) pursuant to mail,
telegraph,
telephone or other similar orders received or billed at or from the
Retail
Premises, and (iv) by means of mechanical or other vending devices,
and (b) all
monies or other things of
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value received by Tenant from its operations at the Retail Premises
(which are
not excluded from Gross Sales by the next succeeding sentence)
including all
finance charges, cost of gift or merchandise certificates and all
deposits not
refunded to customers. Gross Sales shall not include (x) the
exchange of
merchandise between stores of Tenant where such exchange is made
solely for the
convenient operation of Tenant's business and neither for the
purpose of
depriving Landlord of the benefits of a sale which would otherwise
be made at or
from the Retail Premises nor for the purpose of consummating a sale
which has
been theretofore made at or from the Retail Premises, (y) sales of
trade
fixtures which are not part of Tenant's stock in trade and not sold
in the
regular course of Tenant's business, or (z) the amount of any city,
county,
state or federal sales tax, luxury tax or excise tax on sales if
the tax is
added to the selling price and separately stated and actually paid
to the taxing
authority by Tenant; provided, however, no franchise or capital
stock tax and no
income or similar tax based upon income, profits or Gross Sales
shall be
deducted from Gross Sales in any event whatsoever. Cash or credit
refunds made
upon transactions included within the Gross Sales, but not
exceeding the selling
price of merchandise returned by the purchaser and accepted by
Tenant, shall be
deducted from the Gross Sales for the period when such refunds are
made. Each
charge or sale upon installment or credit or layaway, so called,
shall be
treated as a sale for the full price in the month during which such
charge or
sale shall be made, irrespective of the time when Tenant shall
receive payment
from its customer. Each lease or rental or license of merchandise
to customers
shall be treated as a sale in the month in which the lease, rental
or license is
made for a price equal to the total rent or license fee payable.
For purposes of
this paragraph the word "Tenant" shall include any of Tenant's
subtenants,
concessionaires and licensees.
P. Guarantor: G-III Apparel Group Ltd. Guarantor has executed and
delivered
to Landlord a Guaranty Agreement simultaneously herewith.
Q. Insurance Requirements: Rules, regulations, orders and other
requirements of the applicable board of underwriters and/or the
applicable fire
insurance rating organization and/or any other similar body
performing the same
or similar functions and having jurisdiction over the Land and
Building, whether
now or hereafter in force.
R. Land: The Land upon which the Building and Common Areas are
located. The
Land is described on Exhibit B.
S. Landlord's Work: The materials and work to be furnished,
installed and
performed by Landlord at its expense in accordance with the
provisions of
Exhibit C.
T. Legal Requirements: Laws and ordinances of all federal, state,
city,
town, county, borough and village governments, and rules,
regulations, orders
and directives of all departments, subdivisions, bureaus, agencies
or offices
thereof, and of any other governmental, public or quasi-public
authorities
having jurisdiction over the Land and Building, whether now or
hereafter in
force, including, but not limited to, those pertaining to
environmental matters.
3
U. Mortgage: A mortgage and/or a deed of trust.
V. Mortgagee: A holder of a mortgage or a beneficiary of a deed of
trust.
W. Operating Expenses: The sum of the following: (1) the cost and
expense
(whether or not within the contemplation of the parties) for the
repair,
replacement, maintenance, policing, insurance and operation of the
Building and
Land, and (2) the Building Fraction of the sum of (a) the cost and
expense for
the repair, replacement, maintenance, policing, insurance and
operation of the
Development Common Areas; (b) the Real Estate Taxes, if any,
attributable to the
Development Common Areas; The "Operating Expenses" shall, include,
without
limitation, the following: (i) the cost for rent, casualty,
liability, boiler
and fidelity insurance, (ii) if an independent managing agent is
employed by
Landlord, the fees payable to such agent (provided the same are
competitive with
the fees payable to independent managing agents of comparable
facilities in
Hudson County), and (iii) reasonable legal, accounting and other
professional
fees. Operating Expenses shall specifically exclude the following:
(i)
depreciation; (ii) debt service on any Superior Mortgage; (iii)
leasehold
improvements specifically attributable to tenants other than the
Tenant; (iv)
brokerage commissions; (v) sale or refinancing costs; (vi)
attorneys fees and
other costs and expenses incurred in negotiations with prospective
tenants,
disputes with other tenants or eviction proceedings against other
tenants; (vii)
penalties or interest due to Landlord's violations of any Legal
Requirement;
(viii) costs for which Landlord actually receives compensation from
insurance
proceeds. All items included in Operating Expenses shall be
determined in
accordance with generally accepted accounting principles
consistently applied.
Wl. Percentage Rent: The amount for any period computed in
accordance with
the provisions of Section 3.02.
W2. Percentage Rent Break Point Amount: An amount equal to the
product of
(a) the total square footage of the Retail Premises and (b) Three
Hundred Fifty
and 00/100 Dollars ($350.00).
W3. Percentage Rent Rate: 5%.
X. Permitted Uses: Warehousing and distribution of leather and
other
wearing apparel and accessories, and the sewing, pressing and
assembly of such
garments. Tenant shall also be permitted to utilize not more than
8,490 square
feet of Floor Space of the Demised Premises for retail purposes
subject to
applicable zoning requirements.
Y. Person: A natural person or persons, a partnership, a
corporation, or
any other form of business or legal association or entity.
Z. Ready for Occupancy: The condition of the Demised Premises when
for the
first time the Landlord's Work shall have been substantially
completed and, if
same is required to be obtained by Landlord, a temporary,
permanent, or
continuing Certificate of Occupancy shall have been issued
permitting use of the
Demised Premises for the Permitted Uses. The Landlord's Work shall
be
4
deemed substantially completed notwithstanding the fact that minor
or
insubstantial details of construction, mechanical adjustment or
decoration
remain to be performed, the noncompletion of which does not
materially interfere
with Tenant's use of the Demised Premises.
AA. Real Estate Taxes: The real estate taxes, assessments and
special
assessments imposed upon the Building and Land by any federal,
state, municipal
or other governments or governmental bodies or authorities, and any
expenses
incurred by Landlord in contesting such taxes or assessments and/or
the assessed
value of the Building and Land, which expenses shall be allocated
to the period
of time to which such expenses relate. If at any time during the
Term the
methods of taxation prevailing on the date hereof shall be altered
so that in
lieu of, or as an addition to or as a substitute for, the whole or
any part of
such real estate taxes, assessments and special assessments now
imposed on real
estate there shall be levied, assessed or imposed (a) a tax,
assessment, levy,
imposition, license fee or charge wholly or partially as a capital
levy or
otherwise on the rents received therefrom, or (b) any other such
additional or
substitute tax, assessment, levy, imposition or charge, then all
such taxes,
assessments, levies, impositions, fees or charges or the part
thereof so
measured or based shall be deemed to be included within the term
"Real Estate
Taxes" for the purposes hereof.
BB. Rent: The Fixed Rent, the Percentage Rent and the Additional
Charges.
BB1. Retail Premises: That area within the Demised Premises from
which
Tenant sells goods on a retail basis, including dressing/fitting
rooms, related
storage areas, and any other area within the Demised Premises
directly related
to the sale of such goods.
CC. Rules and Regulations: The rules and regulations that may be
promulgated by Landlord from time to time. The Rules and
Regulations now in
effect are attached hereto as Exhibit D.
DD. Security Deposit: $80,389.50 (if in the form of a Letter of
Credit);
$60,297.13 (if in the form of cash).
EE. Successor Landlord: As defined in Section 9.03.
FF. Superior Lease: Any lease to which this Lease is, at the time
referred
to, subject and subordinate.
GG. Superior Lessor: The lessor of a Superior Lease or its
successor in
interest, at the time referred to.
HH. Superior Mortgage: Any Mortgage to which this Lease is, at the
time
referred to, subject and subordinate.
II. Superior Mortgagee: The Mortgagee of a Superior Mortgage at the
time
referred to.
5
JJ. Tenant's Fraction: 53.06%. If the size of the Demised Premises
or the
Building shall be changed from the initial size thereof, due to any
taking, any
construction or alteration work or otherwise, the Tenant's Fraction
shall be
changed to the fraction the numerator of which shall be the Floor
Space of the
Demised Premises and the denominator of which shall be the Floor
Space of the
Building.
KK. Tenant's Property: As defined in Section 16.02.
LL. Tenant's Work: The facilities, materials and work which may be
undertaken by or for the account of Tenant (other than the
Landlord's Work) to
equip, decorate and furnish the Demised Premises for Tenant's
occupancy in
accordance with the provisions of Exhibit C.
MM. Term: The period commencing on the Commencement Date and ending
at
11:59 p.m. of the Expiration Date, but in any event the Term shall
end on the
date when this Lease is earlier terminated.
NN. Unavoidable Delays: A delay arising from or as a result of a
strike,
lockout, or labor difficulty, explosion, sabotage, accident, riot
or civil
commotion, act of war, fire or other catastrophe, Legal Requirement
or an act of
the other party and any cause beyond the reasonable control of that
party,
provided that the party asserting such Unavoidable Delay has
exercised its best
efforts to minimize such delay.
ARTICLE 2 - DEMISE AND TERM
2.01. Landlord hereby leases to Tenant, and Tenant hereby hires
from
Landlord, the Demised Premises, for the Term. This Lease is subject
to (a) any
and all existing encumbrances, conditions, rights, covenants,
easements,
restrictions and rights of way, of record, and other matters of
record,
applicable zoning and building laws, regulations and codes, and
such matters as
may be disclosed by an inspection or survey, and (b) easements now
or hereafter
created by Landlord in, under, over, across and upon a strip of
land twenty feet
(20') in width running along all lot lines of the Land for sewer,
water,
electric, gas and other utility lines and services now or hereafter
installed;
provided, however, Landlord represents, covenants and warrants to
Tenant that
(i) the Demised Premises may be used and occupied for the purposes
set forth
herein; (ii) Tenant shall have adequate means of ingress and egress
to the
Demised Premises for such uses; and (iii) the foregoing shall in no
manner
interfere with Tenant's use and quiet enjoyment of the Demised
Premises during
the Term. Promptly following the Commencement Date, the parties
hereto shall
enter into an agreement in form and substance satisfactory to
Landlord setting
forth the Commencement Date.
ARTICLE 3 - RENT
3.01. Tenant shall pay the Fixed Rent in equal monthly installments
in
advance on the first day of each and every calendar month during
the Term
(except that Tenant shall pay, upon the execution and delivery of
this Lease by
Tenant, the Advance Rent, to be applied against the first
installment or
6
installments of Fixed Rent becoming due under this Lease). If the
Commencement
Date occurs on a day other than the first day of a calendar month,
the Fixed
Rent for the partial calendar month at the commencement of the Term
shall be
prorated.
3.02. Within fifteen (15) days after the end of each calendar month
during
the Term, Tenant shall submit to Landlord a statement certified by
Tenant (by an
authorized officer if Tenant is a corporation or by a partner if
Tenant is a
partnership) stating the Gross Sales (including an itemization of
all claimed
deductions therefrom) for such month. Within fifteen (15) days
after the end of
each Calendar Quarter, Tenant shall pay to Landlord as Percentage
Rent the
product of [(a) the amount, if any, by which the aggregate Gross
Sales for the
Calendar Year in which such Calendar Quarter occurs up to the end
of such
Calendar Quarter exceeds the Percentage Rent Break Point Amount and
(b) the
Percentage Rent Rate] less (c) the amount theretofore paid as
Percentage Rent
for the Calendar Year in which such Calendar Quarter occurs. Within
ninety (90)
days after the end of each Calendar year, including any partial
Calendar Year at
the beginning of the Term, and after the end of the Term, Tenant
shall submit to
Landlord a statement certified by an independent certified public
accountant
stating the Gross Sales (including an itemization of all claimed
deductions
therefrom) and the Percentage Rent for such Calendar Year, or
partial Calendar
Year if the Term shall begin on a date other than a January 1st
and/or end on a
date other than a December 31st, as the case may be, and if the
Percentage Rent
so stated for such period is more or less than the Percentage Rent
paid for such
period, Tenant shall pay to Landlord the deficiency, or Landlord
shall refund to
Tenant the excess, within twenty (20) days after submission of such
statement of
Gross Sales. For at least thirty-six (36) months after the
expiration of each
Calendar Year, including any partial Calendar Year at the beginning
of the Term,
and after the end of the Term, Tenant shall keep and maintain (and
shall cause
all subtenants, concessionaires and licensees to keep and maintain)
in the
Demised Premises or the main office of Tenant full and accurate
books of account
and records from which the Gross Sales can be determined. The books
and records
maintained shall include, but shall not be limited to (i) cash
register tapes
showing continuous grand total (from a sealed cash register), (ii)
original
source documents, (iii) sequentially numbered receipts, (iv)
federal, state &
local tax returns, (v) receipts from daily bank deposits, (vi)
computer
printouts and (vii) bank statements. Landlord shall have the right
from time to
time during such thirty-six (36) month period to inspect and audit
all such
books and records relating to Gross Sales, and Tenant, each
subtenant,
concessionaire and licensee will produce the same on request of
Landlord. If any
such inspection and audit discloses that the Gross Sales were
understated,
Tenant shall forthwith pay to Landlord any additional Percentage
Rent shown to
be payable, and if the Gross Sales for any Calendar Year or partial
Calendar
Year were understated by more than Fifteen Thousand Dollars
($15,000.00), Tenant
shall also pay the cost of Landlord's inspection and audit.
Landlord does not in
any way, or for any purpose, become a partner or joint venturer
with Tenant
hereunder. The provisions of this Lease relating to Percentage Rent
are included
solely for the purpose of providing a method whereby rentals are to
be measured
and ascertained.
7
3.03. The Rent shall be paid in lawful money of the United States
to
Landlord at its office, or such other place, or Landlord's agent,
as Landlord
shall designate by notice to Tenant. Tenant shall pay the Rent
promptly when due
without notice or demand therefor and without any abatement,
deduction or setoff
for any reason whatsoever, except as may be expressly provided in
this Lease. If
Tenant makes any payment to Landlord by check, same shall be by
check of Tenant
and Landlord shall not be required to accept the check of any other
Person, and
any check received by Landlord shall be deemed received subject to
collection.
If any check is mailed by Tenant, Tenant shall post such check in
sufficient
time prior to the date when payment is due so that such check will
be received
by Landlord on or before the date when payment is due.
3.04. No payment by Tenant or receipt or acceptance by Landlord of
a lesser
amount than the correct Rent shall be deemed to be other than a
payment on
account, nor shall any endorsement or statement on any check or any
letter
accompanying any check or payment be deemed an accord and
satisfaction, and
Landlord may accept such check or payment without prejudice to
Landlord's right
to recover the balance or pursue any other remedy in this Lease or
at law
provided.
3.05. If Tenant is in arrears in payment of Rent, Tenant waives
Tenant's
right, if any, to designate the items to which any payments made by
Tenant are
to be credited, and Landlord may apply any payments made by Tenant
to such items
as Landlord sees fit, irrespective of and notwithstanding any
designation or
request by Tenant as to the items to which any such payments shall
be credited.
3.06. In the event that any installment of Rent due hereunder shall
be
overdue for five (5) business days, a "Late Charge" equal to three
percent (3%)
or the maximum rate permitted by law, whichever is less ("Late
Payment Rate")
for Rent so overdue may be charged by Landlord for each month or
part thereof
that the same remains overdue. Any such Late Charges if not
previously paid
shall, at the option of the Landlord, be added to and become part
of the next
succeeding Rent payment to be made hereunder.
ARTICLE 4 - USE OF DEMISED PREMISES
4.01. Tenant shall use and occupy the Demised Premises for the
Permitted
Uses, and Tenant shall not use or permit or suffer the use of the
Demised
Premises or any part thereof for any other purpose.
4.02. If any governmental license or permit shall be required for
the
proper and lawful conduct of Tenant's business in the Demised
Premises or any
part thereof, Tenant shall duly procure and thereafter maintain
such license or
permit and submit the same to Landlord for inspection. Tenant shall
at all times
comply with the terms and conditions of each such license or
permit. Tenant
shall not at any time use or occupy, or suffer or permit anyone to
use or occupy
the Demised Premises, or do or permit anything to be done in the
Demised
Premises, in any manner which (a) violates the Certificate of
Occupancy for the
Demised Premises or for the Building; (b) causes or is
8
reasonably likely to cause injury to the Building or any equipment,
facilities
or systems therein; (c) constitutes a violation of the Legal
Requirements or
Insurance Requirements; (d) impairs or tends to impair the
appearance of the
Building; (e) impairs or tends to impair the proper and economic
maintenance,
operation and repair of the Building and/or its equipment,
facilities or
systems; or (f) materially annoys or inconveniences other tenants
or occupants
of the Building.
ARTICLE 5 - PREPARATION OF DEMISED PREMISES
5.01. The Demised Premises shall be completed and prepared for
Tenant's
occupancy in the manner described in, and subject to the provisions
of, Exhibit
C. Except as expressly provided to the contrary in this Lease, the
taking of
possession by Tenant of the Demised Premises shall be conclusive
evidence as
against Tenant that the Demised Premises and the Building were in
good and
satisfactory condition at the time such possession was taken.
Except as
expressly provided to the contrary in this Lease, Tenant is leasing
the Demised
Premises "as is" on the date hereof.
5.02. If the substantial completion of the Landlord's Work shall be
delayed
due to (a) any act or omission of Tenant or any of its employees,
agents or
contractors (including, without limitation, [i] any delays due to
changes in or
additions to the Landlord's Work, or [ii] any delays by Tenant in
the submission
of plans, drawings, specifications or other information or in
approving any
working drawings or estimates or in giving any authorizations or
approvals), or
(b) any additional time needed for the completion of the Landlord's
Work by the
inclusion in the Landlord's Work of any items specified by Tenant
that require
long lead time for delivery or installation, then the Demised
Premises shall be
deemed Ready for Occupancy on the date when they would have been
ready but for
such delay(s). The Demised Premises shall be conclusively presumed
to be in
satisfactory condition on the Commencement Date except for the
minor or
insubstantial details of which Tenant gives Landlord notice within
thirty (30)
days after the Commencement Date specifying such details (the
"Punch List") with
reasonable particularity. Landlord shall use best efforts to
complete said Punch
List within thirty (30) days of Landlord's receipt of Tenant's
Punch List.
5.03. INTENTIONALLY OMITTED.
5.04. Landlord reserves the right, at any time and from time to
time, to
increase, reduce or change the number, type, size, location,
elevation, nature
and use of any of the Common Areas and the Building and any other
buildings and
other improvements on the Land and in the Development, including,
without
limitation, the right to move and/or remove same, provided same
shall not
unreasonably block or interfere with Tenant's means of ingress or
egress to and
from the Demised Premises.
ARTICLE 6 - TAX AND OPERATING EXPENSE PAYMENTS
6.01. Throughout the Term, Tenant agrees to pay to Landlord as an
Additional Charge hereunder, within fifteen (15) days in advance of
the final
9
date for which such is due without interest or penalty, Tenant's
Fraction of the
Real Estate Taxes. If any assessment is payable in annual
installments or in a
lump sum and Tenant does not elect to reimburse Landlord for such
assessment in
a lump sum, there shall be added to the amount of the Real Estate
Taxes payable
for the Calendar Year in which such assessment is payable and such
subsequent
Calendar Year only that amount of such assessment, together with
such interest
thereon, as would have been payable to the municipality in said
Calendar Year if
Landlord had elected to pay said assessment in annual installments.
Landlord
shall submit to Tenant copies of all bills covering Real Estate
Taxes together
with an invoice showing the calculation of Tenant's Fraction of
such Real Estate
Taxes.
6.02. Real Estate Taxes, whether or not a lien upon the Demised
Premises
shall be apportioned between Landlord and Tenant at the beginning
and end of the
Term; it being intended that Tenant shall pay only that portion of
the Real
Estate Taxes as is allocable to the Demised Premises for the Term.
6.03. Tenant shall pay to Landlord Tenant's Fraction of the
Operating
Expenses within twenty (20) days after Landlord submits to Tenant
an invoice for
same.
6.04. Each such statement given by Landlord pursuant to Section
6.01 or
Section 6.03 shall be conclusive and binding upon Tenant unless
within 30 days
after the receipt of such statement Tenant shall notify Landlord
that it
disputes the correctness of the statement, specifying the
particular respects in
which the statement is claimed to be incorrect. If such dispute is
not settled
by agreement, either party may submit the dispute to arbitration as
provided in
Article 34. Pending the determination of such dispute by agreement
or
arbitration as aforesaid, Tenant shall, within ten (10) days after
receipt of
such statement, pay the Additional Charges in accordance with
Landlord's
statement, without prejudice to Tenant's position. If the dispute
shall be
determined in Tenant's favor, Landlord shall forthwith pay to
Tenant the amount
of Tenant's overpayment resulting from compliance with Landlord's
statement,
plus interest thereon at the Late Payment Rate calculated from the
date Tenant
first made payment of such disputed charges.
6.05. Landlord hereby grants Tenant the right, upon reasonable
written
notice to Landlord, and at Tenant's sole cost and expense, to
inspect Landlord's
books and records as same relate to Tenant's Operating Expenses and
Real Estate
Taxes. Any such inspection shall occur at Landlord's normal place
of business
and during Landlord's normal business hours.
ARTICLE 7 - COMMON AREAS
7.01. Subject to the provisions of Section 5.04, Landlord will
operate,
manage, equip, light, repair and maintain, or cause to be operated,
managed,
equipped, lighted, repaired and maintained, the Common Areas for
their intended
purposes. Landlord reserves the right, at any time and from time to
time, to
construct within the Common Areas kiosks, fountains, aquariums,
planters, pools
and sculptures, and to install vending machines, telephone booths,
benches and
the like, provided same shall not unreasonably
10
interfere with Tenant's means of ingress or egress to and from the
Demised
Premises and provided same shall not otherwise materially increase
Tenant's
expenses hereunder. Notwithstanding anything herein contained to
the contrary,
Landlord agrees that Tenant shall not be responsible for any
increase in
Operating Expenses related to purely esthetic improvements
installed in the
Common Areas by Landlord unless (i) otherwise approved by Tenant or
(ii)
directly benefitting Tenant's operation at the Demised Premises.
7.02. Tenant and its subtenants and concessionaires, and their
respective
officers, employees, agents, customers and invitees, shall have the
non-exclusive right, in common with Landlord and all others to whom
Landlord has
granted or may hereafter grant such right, but subject to the Rules
and
Regulations, to use the Common Areas. Landlord reserves the right,
upon fifteen
(15) days notice to Tenant (except in the event of an emergency),
to close
temporarily all or any portions of the Common Areas when in
Landlord's
reasonable judgment any such closing is necessary or desirable (a)
to make
repairs or changes or to effect construction, (b) to prevent the
acquisition of
public rights in such areas, (c) to discourage unauthorized
parking, or (d) to
protect or preserve natural persons or property. Landlord may do
such other acts
in and to the Common Areas as in its judgment may be desirable to
improve or
maintain same; provided, however, Landlord hereby agrees to use its
best
efforts, in connection with the exercise of its rights under this
Article 7.02,
not to materially interfere with Tenant's use and occupancy of the
Demised
Premises.
7.03. Tenant agrees that it, any subtenant or licensee and their
respective
officers, employees, contractors and agents will park their
automobiles and
other vehicles only where and as permitted by Landlord. Tenant
will, if and when
so requested by Landlord, furnish Landlord with the license numbers
of any
vehicles of Tenant, any subtenant or licensee and their respective
officers,
employees and agents.
7.04. Subject to the provisions of Article 7.02 hereinabove,
Landlord
hereby agrees that Tenant shall have exclusive right to the use of
the area(s)
outside of the loading docks located within the Demised Premises
subject, also
however, to Landlord's right to grant any other tenant of the
Building access to
and from any other portion of the Building not a part of the
Demised Premises.
ARTICLE 8 - SECURITY
8.01. Tenant has deposited with Landlord the Security Deposit as
security
for the full and faithful payment and performance by Tenant of
Tenant's
obligations under this Lease. If Tenant defaults in the full and
prompt payment
and performance of any of its obligations under this Lease,
including, without
limitation, the payment of Rent, Landlord may use, apply or retain
the whole or
any part of the Security Deposit to the extent required for the
payment of any
Rent or any other sums as to which Tenant is in default or for any
sum which
Landlord may expend or may be required to expend by reason of
Tenant's default
in respect of any of Tenant's obligations under
11
this Lease, including, without limitation, any damages or
deficiency in the
reletting of the Demised Premises, whether such damages or
deficiency accrue
before or after summary proceedings or other re-entry by Landlord.
If Landlord
shall so use, apply or retain the whole or any part of the
security, Tenant
shall upon demand immediately deposit with Landlord a sum equal to
the amount so
used, applied and retained, as security as aforesaid. If Tenant
shall fully and
faithfully pay and perform all of Tenant's obligations under this
Lease, the
Security Deposit or any balance thereof to which Tenant is entitled
shall be
returned or paid over to Tenant after the date on which this Lease
shall expire
or sooner end or terminate, and after delivery to Landlord of
entire possession
of the Demised Premises. In the event of any sale or leasing of the
Land,
Landlord shall have the right to transfer the security to which
Tenant is
entitled to the vendee or lessee and Landlord shall thereupon be
released by
Tenant from all liability for the return or payment thereof; and
Tenant shall
look solely to the new landlord for the return or payment of the
same; and the
provisions hereof shall apply to every transfer or assignment made
of the same
to a new landlord. Tenant shall not assign or encumber or attempt
to assign or
encumber the monies deposited herein as security, and neither
Landlord nor its
successors or assigns shall be bound by any such assignment,
encumbrance,
attempted assignment or attempted encumbrance.
8.02. Tenant shall have the option of posting a letter of credit in
lieu of
a cash security deposit in which case the following provisions
(i.e. Articles
8.02, 8.03 and 8.04) shall apply: As security for the performance
by Tenant of
all the terms, conditions and covenants of this Lease upon Tenant's
part to be
performed, Tenant shall provide to Landlord an irrevocable Letter
of Credit in
the amount of Eighty Thousand Three Hundred Eighty Nine and 50/100
($80,389.50)
in form and substance satisfactory to Landlord. Landlord shall have
the right,
upon thirty (30) days notice to Tenant (except for Tenant's
non-payment of Rent
or for Tenant's failure to comply with Article 8.03 for which no
notice shall be
required), and regardless of the exercise of any other remedy the
Landlord may
have by reason of a default, to draw upon said Letter of Credit to
cure any
default of Tenant and if Landlord does so, Tenant shall upon
demand,
additionally fund the Letter of Credit with the amount so drawn so
that Landlord
shall have the full deposit on hand at all times during the Term of
this Lease.
In the event of a sale of the Building or a lease of the Building,
subject to
this Lease, Landlord shall have the right to transfer the security
to the vendee
or lessee.
8.03. The Letter of Credit shall be the type which is automatically
renewed
on an annual basis (annual Renewal Date); and will contain a
provision requiring
the issuer thereof to give the beneficiary (Landlord) sixty (60)
day advance
written notice of its intention not to renew the Letter of Credit
on the next
Annual Renewal Date.
8.04. In the event Tenant shall fail to deliver to Landlord a
substitute
irrevocable Letter of Credit, in the amount stated above, on or
before thirty
(30) days prior to the next Annual Renewal Date, said failure shall
be deemed a
default under this Lease. Landlord may, in its discretion treat
this the same as
a default in the payment of rent or any other default and pursue
the appropriate
remedy. In addition, and not in limitation,
12
Landlord shall be permitted to draw upon the Letter of Credit as in
the case of
any other default by Tenant under this Lease.
ARTICLE 9 - SUBORDINATION
9.01. This Lease, and all rights of Tenant hereunder, are and shall
be
subject and subordinate to all ground leases and underlying leases
of the Land
and/or the Building now or hereafter existing and to all Mortgages
which may now
or hereafter affect the Land and/or building and/or any of such
leases, whether
or not such Mortgages or leases shall also cover other lands and/or
buildings,
to each and every advance made or hereafter to be made under such
Mortgages, and
to all renewals, modifications, replacements and extensions of such
leases and
such Mortgages and spreaders and consolidations of such Mortgages.
The
provisions of this Section 9.01 shall be self-operative and no
further
instrument of subordination shall be required. In confirmation of
such
subordination, Tenant shall promptly execute, acknowledge and
deliver any
instrument that Landlord, the lessor under any such lease or the
Mortgagee of
any such Mortgage or any of their respective successors in interest
may
reasonably request to evidence such subordination.
9.02. If any act or omission of Landlord would give Tenant the
right,
immediately or after lapse of a period of time, to cancel or
terminate this
Lease, or to claim a partial or total eviction, Tenant shall not
exercise such
right (a) until it has given written notice of such act or omission
to Landlord
and each Superior Mortgagee and each Superior Lessor whose name and
address
shall previously have been furnished to Tenant by Landlord in
writing, and (b)
until a reasonable period for remedying such act or omission shall
have elapsed
following the giving of such notice and following the time when
such Superior
Mortgagee or Superior Lessor shall have become entitled under such
Superior
Mortgage or Superior Lease, as the case may be, to remedy the same
(which
reasonable period shall in no event be less than the period to
which Landlord
would be entitled under this Lease or otherwise, after similar
notice, to effect
such remedy), provided such Superior Mortgagee or Superior Lessor
shall with due
diligence give Tenant notice of intention to, and commence and
continue to,
remedy such act or omission.
9.03. If any Superior Lessor or Superior Mortgagee shall succeed to
the
rights of Landlord under this Lease, whether through possession or
foreclosure
action or delivery of a new lease or deed, then at the request of
such party so
succeeding to Landlord's rights ("Successor Landlord") and upon
such Successor
Landlord's written agreement to accept Tenant's attornment, Tenant
shall attorn
to and recognize such Successor Landlord as Tenant's landlord under
this Lease
and shall promptly execute and deliver any instrument that such
Successor
Landlord may reasonably request to evidence such attornment. Upon
such
attornment this Lease shall continue in full force and effect as a
direct lease
between the Successor Landlord and Tenant upon all of the terms,
conditions and
covenants as are set forth in this Lease except that the Successor
Landlord
shall not (a) be liable for any previous act or omission of
Landlord under this
Lease; (b) be subject to any offset, not expressly provided for in
this Lease,
which theretofore shall have accrued to Tenant against Landlord;
(c) be liable
for the return of any Security Deposit, in
13
whole or in part, to the extent that same is not paid over to the
Successor
Landlord; or (d) be bound by any previous prepayment of more than
one month's
Fixed Rent unless such prepayment shall have been expressly
approved in writing
by the Superior Lessor of the Superior Lease or the Mortgagee of
the Superior
Mortgage through or by reason of which the Successor Landlord shall
have
succeeded to the rights of Landlord under this Lease.
9.04. If any then present or prospective Superior Mortgagee shall
require
any modification(s) of this Lease, Tenant shall promptly execute
and deliver to
Landlord such instruments effecting such modification(s) as
Landlord shall
request, provided that such modification(s) do not adversely affect
in any
material respect any of Tenant's rights or obligations under this
Lease.
9.05. Landlord hereby agrees to provide Tenant with a
Non-Disturbance
Agreement from the existing Superior Mortgagee provided same is in
the form
annexed hereto as Exhibit E.
9.06. As an express condition to the agreement of Tenant to the
foregoing
provisions of this Article 9, Landlord hereby agrees to provide
Tenant with a
Non-Disturbance Agreement from any future Superior Mortgagee
provided same is in
the form, generally, as that annexed hereto as Exhibit E.
9.07. Landlord hereby represents that it is not presently in
default of the
existing Superior Mortgage.
9.08. Any Superior Mortgagee's fees and/or costs (including
reasonable
legal costs) associated with the acquisition and delivery of any
Non-
Disturbance Agreement shall be borne by Landlord.
ARTICLE 10 - QUIET ENJOYMENT
10.01. So long as Tenant pays all of the Rent and performs all of
Tenant's
other obligations hereunder, Tenant shall peaceably and quietly
have, hold and
enjoy the Demised Premises without hindrance, ejection or
molestation by
Landlord or any person lawfully claiming through or under Landlord,
subject,
nevertheless, to the provisions of this Lease and to Superior
Leases and
Superior Mortgages, of which Landlord has notified Tenant in
writing (which
notice requirement, for purposes of this Section 10.01, shall be
deemed
satisfied upon Tenant's execution of an estoppel certificate or
non-disturbance,
subordination and attornment agreement with respect to any such
Superior Lessor
or Superior Mortgagee).
ARTICLE 11 - ASSIGNMENT, SUBLETTING AND MORTGAGING
11.01. Tenant shall not, whether voluntarily, involuntarily, or by
operation of law or otherwise, (a) assign or otherwise transfer
this Lease, or
offer or advertise to do so, (b) sublet the Demised Premises or any
part
thereof, or offer or advertise to do so, or allow the same to be
used, occupied
or utilized by anyone other than Tenant, or (c) mortgage, pledge,
encumber or
otherwise hypothecate this Lease in any manner whatsoever, without
14
in each instance obtaining the prior written consent of Landlord,
which consent
shall not be unreasonably withheld, delayed, or conditioned.
Landlord hereby
acknowledges that Tenant intends to sublease all or some portion of
the Retail
Premises. Landlord hereby consents to such subletting provided,
however, in
consideration thereof, Tenant hereby agrees to pay Landlord, as an
Additional
Charge hereunder, fifty percent (50%) of the net profit achieved
from such
subletting. "Net Profit", as that term is used herein, shall mean
the difference
between (a) the rent Tenant receives from the aforesaid
subtenant(s) (which
shall include, but not be limited to, all fixed rent and percentage
rent, or
similar such "rents" without placing any emphasis on terminology)
with deduction
for Tenant's reasonable expenses (i.e. brokerage commissions,
reasonable cost of
construction, etc.) specifically associated with such subletting
and (b) the
Rent Tenant is obligated to pay Landlord hereunder. Tenant agrees
to provide
Landlord with copies of any such sublease(s) within ten (10) days
of execution
of same. It is expressly understood and agreed by the parties
hereto that the
gross sales generated by said subtenant(s) will not be included in
the
definition of Gross Sales set forth at Article 1.01.(01); provided,
however
Tenant agrees that notwithstanding the terminology used in any
sublease, it will
calculate the gross sales of any such subtenant, for purposes of
calculating the
50/50 division of profits discussed above, in a manner similar to
the method by
which Gross Sales are calculated hereunder.
11.02. If at any time (a) the original Tenant named herein, (b) the
then
Tenant, (c) any Guarantor, or (d) any Person owning a majority of
the voting
stock of, or directly or indirectly controlling, the then Tenant
shall be a
corporation or partnership, any transfer of voting stock or
partnership interest
resulting in the person(s) who shall have owned a majority of such
corporation's
shares of voting stock or the general partners' interest in such
partnership, as
the case may be, immediately before such transfer, ceasing to own a
majority of
such shares of voting stock or general partner's interest, as the
case may be,
except as the result of transfers by inheritance, shall be deemed
to be an
assignment of this Lease as to which Landlord's consent shall have
been
required, and in any such event Tenant shall notify Landlord. The
provisions of
this Section 11.02 shall not be applicable to any corporation all
the
outstanding voting stock of which is listed on a national
securities exchange
(as defined in the Securities Exchange Act of 1934, as amended) or
is traded in
the over-the-counter market with quotations reported by the
National Association
of Securities Dealers through its automated system for reporting
quotations and
shall not apply to transactions with a corporation into or with
which the then
Tenant is merged or consolidated or to which substantially all of
the then
Tenant's assets are transferred or to any corporation which
controls or is
controlled by the then Tenant or is under common control with the
then Tenant,
provided that in any of such events (i) the successor to Tenant has
a net worth
computed in accordance with generally accepted accounting
principles at least
equal to the greater of (1) the net worth of Tenant immediately
prior to such
merger, consolidation or transfer, or (2) the net worth of the
original Tenant
on the date of this Lease, and (ii) proof satisfactory to Landlord
of such net
worth shall have been delivered to Landlord at least 10 days prior
to the
effective date of any such transaction. For the purposes of this
Section, the
words "voting stock" shall refer to shares of stock regularly
entitled to vote
for the election of
15
directors of the corporation. Landlord shall have the right at any
time and from
time to time during the Term to inspect the stock record books of
the
corporation to which the provisions of this Section 11.02 apply,
and Tenant will
produce the same on request of Landlord.
11.03. If this Lease is assigned, whether or not in violation of
this
Lease, Landlord may collect rent from the assignee. If the Demised
Premises or
any part thereof are sublet or used or occupied by anybody other
than Tenant,
whether or not in violation of this Lease, Landlord may, after
default by
Tenant, and expiration of Tenant's time to cure such default,
collect rent from
the subtenant or occupant. In either event, Landlord may apply the
net amount
collected to the Rent, but no such assignment, subletting,
occupancy or
collection shall be deemed a waiver of any of the provisions of
Section 11.01 or
Section 11.02, or the acceptance of the assignee, subtenant or
occupant as
tenant, or a release of Tenant from the performance by Tenant of
Tenant's
obligations under this Lease. The consent by Landlord to any
assignment,
mortgaging, subletting or use or occupancy by others shall not in
any way be
considered to relieve Tenant from obtaining the express written
consent of
Landlord to any other or further assignment, mortgaging or
subletting or use or
occupancy by others not expressly permitted by this Article 11.
References in
this Lease to use or occupancy by others (that is, anyone other
than Tenant)
shall not be construed as limited to subtenants and those claiming
under or
through subtenants but shall be construed as including also
licensees and others
claiming under or through Tenant, immediately or remotely.
11.04. Any permitted assignment or transfer, whether made with
Landlord's
consent pursuant to Section 11.01 or without Landlord's consent if
permitted by
Section 11.02, shall be made only if, and shall not be effective
until, the
assignee shall execute, acknowledge and deliver to Landlord an
agreement in form
and substance reasonably satisfactory to Landlord whereby the
assignee shall
assume Tenant's obligations under this Lease and whereby the
assignee shall
agree that all of the provisions in this Article 11 shall,
notwithstanding such
assignment or transfer, continue to be binding upon it in respect
to all future
assignments and transfers. Notwithstanding any assignment or
transfer, whether
or not in violation of the provisions of this Lease, and
notwithstanding the
acceptance of Rent by Landlord from an assignee, transferee, or any
other party,
the original Tenant and any other person)s) who at any time was or
were Tenant
shall remain fully liable for the payment of the Rent and for
Tenant's other
obligations under this Lease.
11.05. The liability of the original named Tenant and any other
Person(s)
(including but not limited to any Guarantor) who at any time are or
become
responsible for Tenant's obligations under this Lease shall not be
discharged,
released or impaired by any agreement or stipulation made by
Landlord extending
the time of, or modifying any of the terms or obligations under
this Lease, or
by any waiver or failure of Landlord to enforce, any of this Lease.
11.06. The listing of any name other than that of Tenant, whether
on the
doors of the Demised Premises or the Building directory, or
otherwise, shall not
operate to vest any right or interest in this Lease or in the
16
Demised Premises, nor shall it be deemed to be the consent of
Landlord to any
assignment or transfer of this Lease or to any sublease of the
Demised Premises
or to the use or occupancy thereof by others.
11.07. Without limiting any of the provisions of Article 27, if
pursuant to
the Federal Bankruptcy Code (or any similar law hereafter enacted
having the
same general purpose), Tenant is permitted to assign this Lease
notwithstanding
the restrictions contained in this Lease, adequate assurance of
future
performance by an assignee expressly permitted under such Code
shall be deemed
to mean the deposit of cash security in an amount equal to the sum
of one (1)
year's Fixed Rent, which deposit shall be held by Landlord for the
balance of
the Term, without interest, as security for the full performance of
all of
Tenant's obligations under this Lease, to be held and applied in
the manner
specified for security in Section 8.01.
11.08. If Tenant shall propose to assign or in any manner transfer
this
Lease or any interest therein, or sublet the Demised Premises or
any part or
parts thereof, or grant any concession or license or otherwise
permit occupancy
of all or any part of the Demised Premises by any person, Tenant
shall give
notice thereof to Landlord, together with a copy of the proposed
instrument that
is to accomplish same and such financial and other information
pertaining to the
proposed assignee, transferee, subtenant, concessionaire or
licensee as Landlord
shall reasonably require.
ARTICLE 12 - COMPLIANCE WITH LAWS
12.01. Tenant shall comply with all Legal Requirements which shall,
in
respect of the Demised Premises or the use and occupation thereof,
or the
abatement of any nuisance in, on or about the Demised Premises,
impose any
violation, order or duty on Landlord or Tenant; and Tenant shall
pay all the
costs, expenses, fines, penalties and damages which may be imposed
upon Landlord
or any Superior Lessor by reason of or arising out of Tenant's
failure to fully
and promptly comply with and observe the provisions of this Section
12.01.
However, Tenant need not comply with any such law or requirement of
any public
authority, nor shall such failure to comply be deemed an Event of
Default
hereunder, so long as Tenant shall be contesting the validity
thereof, or the
applicability thereof to the Demised Premises, in accordance with
Section 12.02.
12.02. Tenant may contest, by appropriate proceedings prosecuted
diligently
and in good faith, the validity, or applicability to Tenant or the
Demised
Premises, of any Legal Requirement, provided that (a) Landlord
shall not be
subject to criminal penalty or to prosecution for a crime, and
neither the
Demised Premises nor any part thereof shall be subject to being
condemned or
vacated, by reason of non-compliance or otherwise by reason of such
contest; (b)
be
